In an analysis of the government’s Right to Buy figures, the LGA also found the number of houses that councils have started to replace fell by over a quarter last year.
The analysis found that 12,246 council homes were sold to tenants under Right to Buy in England in 2015-16. However, councils only started building 2,055 replacement houses, around 17% of the total. The number of new constructions was also down 27% from 2,809 in 2014/15.
The LGA forecasts that 66,000 homes will be sold to council tenants by 2020, and warns that councils are unlikely to be able to replace the majority of these homes.
Nick Forbes, LGA senior vice chair, said that the current arrangements for right to Buy were restricting councils from being able to replace homes being sold under the scheme.
Scotland and Wales have recently scrapped national Right to Buy schemes, and Forbes warned it could “quickly become a thing of the past in England if councils continue to be prevented from building new homes”.
He added: “Housing reforms that reduce rents and force councils to sell homes will make building new properties and replacing those sold even more difficult.
“Such a loss in social housing risks pushing more people into the more expensive private rented sector, increasing homelessness and housing benefit spending.”
As well as giving councils greater ability to borrow to invest in housing, councils need to be able to retain 100% of receipts from sales and to set Right to Buy discounts locally so they reflect the cost of houses in the area, he stated.
Current restrictions dictate that the Treasury receives a portion of the receipts from Right to Buy sales, which is not necessarily reinvested in affordable housing. Councils must also spend receipts from Right to Buy within three years, and they are not allowed to use receipts in combination with government grants or money made from the sale of public land.
The LGA warned that the lack of replacement homes will only exacerbate the growing UK housing crisis. It cites its recent report that suggested millions more Britons will likely require some kind of affordable housing thanks to low housing stock and slow wage growth.
